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Fiscal Policy

The choice of currency arrangement is fundamental to the economics of independence. It matters much more than simply the notes and coins in our pockets. It determines how monetary policy is managed, whether there is a separate exchange rate policy, exposure to financial sector risks and even the scope for fiscal policy. In many ways, the choice of currency arrangement will determine the economic governance of an independent Scotland.

The funding of the Northern Ireland Executive (and other devolved governments) has always been central to their ability to provide the public services for which they are responsible. It affects all policy areas, as well as being important in its own right. But since 2007 there have been debates in both Scotland and Wales about financial issues, which increasingly challenge the idea of devolved governments simply relying on a block grant calculated on the basis of the Barnett formula.

The contours of the referendum debate have become clear with a year to go before the vote. Agreement has been reached on the question to be asked. There will, no doubt, be a few surprises over the next year but the broad picture is unlikely to change.

Guest blog by Dr Fabian Zuleeg, Chief Executive Designate of the European Policy Centre, a Brussels-based independent think-tank. This article is based on a paper prepared for the ESRC Conference ‘The Future of the UK and Scotland’ on 2-3 May 2013.

There has been a growing debate about how the benefits system (that is, the system of state benefits, pensions and tax credits) may be affected if Scotland becomes independent. This debate takes place at a time when the benefits system that Scotland currently shares with the rest of the UK is going through some major changes – such as the replacement of most means-tested benefits for working-age recipients by the new universal credit – and facing substantial cuts as part of the fiscal consolidation.

In the first of our new blog series, Politics in a Changing Spain, Dr Robert Liñeira (Universidad Autónoma de Madrid) looks at the recent parliamentary election and its implications for the future of Spanish politics.

In their contribution to our majority nationalism series, Antoine Bilodeau of Concordia University and Luc Turgeon of the University of Ottawa share the result of their survey which compares the way in which Quebecers and Canadians construct community boundaries.